Hous­ing dip at GFC lev­els

Price crashes in Syd­ney, Mel­bourne ac­cel­er­at­ing

HOUSE price falls in Syd­ney and Mel­bourne ap­pear to be ac­cel­er­at­ing and the de­cline could now be larger than that which fol­lowed the GFC a decade ago.

CoreLogic’s he­do­nic home value in­dex re­leased yes­ter­day showed both cities’ prop­erty price falls over the past three months were the fastest since val­ues peaked in Oc­to­ber 2017.

Corelogic said na­tional home val­ues were 6.1 per cent down from their high wa­ter­mark, and were back at Oc­to­ber 2016 lev­els.

But in a sep­a­rate re­port, AMP Cap­i­tal chief econ­o­mist Shane Oliver said prices had fallen 7.8 per cent from their peak, beat­ing their GFC de­cline of 7.6 per cent.

He said the data backed the case for the Re­serve Bank to cut the cash rate to a fresh record low 1.0 per cent.

“It’s also a neg­a­tive for banks and is con­sis­tent with our view that the RBA will cut the cash rate to one per cent by year end,” Dr Oliver said in a state­ment.

Ev­ery cap­i­tal city aside from Can­berra, which record- ed a rise of 0.2 per cent, showed a monthly de­cline in Jan­uary, ac­cord­ing to Corelogic.

Syd­ney fell 1.3 per cent – and 4.5 per cent over three months – while Mel­bourne fell 1.6 and 4.0 re­spec­tively.

Ho­bart re­mains the best per­form­ing mar­ket (from a seller’s per­spec­tive) with prices ris­ing 7.4 per cent in the last year to a me­dian of $457,785.

But Tas­ma­nia’s cap­i­tal is show­ing signs of slow­ing down, record­ing a 0.2 per cent fall in val­ues in Jan­uary.

“Tight credit con­di­tions, weak­en­ing con­sumer sen­ti­ment, less do­mes­tic and for­eign in­vest­ment and higher lev­els of hous­ing sup­ply are the pri­mary driv­ers of the wors­en­ing con­di­tions,” CoreLogic head of re­search Tim Law­less said.

While cap­i­tal cities ex­pe­ri­ence heavy losses, the re­gional mar­kets are health­ier, with the com­bined re­gional in­dex down just 0.6 per cent over the quar­ter com­pared to the com­bined cap­i­tals’ 3.3 per cent.

CoreLogic also es­ti­mates there were 12.3 per cent fewer sales over 12 months com­pared to the pre­vi­ous year.

“There may be a fur­ther dent to con­fi­dence as we ap­proach the fed­eral elec­tion and hous­ing fi­nance con­di­tions are likely to re­main tight af­ter the hand down of the Hayne Royal Com­mis­sion re­port which is due on Mon­day,” Mr Law­less said.